Both the S&P 500 (SPX) and the Nasdaq 100 (NDX) experienced declines exceeding 1% as the trading week commenced, primarily driven by a downturn in the technology sector. Major players such as Nvidia (NVDA), Palantir (PLTR), Apple (AAPL), and Advanced Micro Devices (AMD) are facing significant losses, impacting overall market sentiment.
Compounding the market’s challenges, decreased expectations for a potential interest rate cut in December are contributing to the downward spiral. Current estimates peg the odds of a rate cut at 44.9%, a stark decline from 62.4% just a week prior and a considerable drop from 93.7% a month ago, as indicated by CME’s FedWatch tool. Typically, lower interest rates are favorable for economic growth, as they facilitate cheaper borrowing, which in turn encourages spending and investment.
Looking ahead, investors are bracing for the delayed September jobs report scheduled for release by the Bureau of Labor Statistics (BLS) on Thursday at 8:30 a.m. Eastern Time. This report will encompass critical metrics such as nonfarm payrolls and the unemployment rate, which are essential for the Federal Reserve in making informed decisions regarding interest rates. During the recent government shutdown, private sector data suggested an ongoing weakness in job growth, heightening the stakes for the upcoming report.
While rate cuts traditionally bolster the labor market, Kansas City Fed President Jeff Schmid cautioned last week against overestimating their impact. He noted that lower rates might not significantly rectify underlying issues in the labor market linked to structural challenges posed by technological innovation and shifting immigration policies.
As the markets navigate these dynamics, investors are encouraged to stay informed about macroeconomic events through real-time economic calendars that allow for tailored filtering by impact and region.
